Tax,
Civil Litigation,
California Courts of Appeal,
9th U.S. Circuit Court of Appeals
Feb. 20, 2019
Court OKs award to neutralize tax liabilities on lump-sum payment
A lump-sum award may push a plaintiff into a higher tax bracket. Not considering the taxes might effectively deny the plaintiff the full relief to put him in the position had the unlawful employment discrimination never occurred.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
Most legal settlements and judgments are taxable. Even worse, starting in 2018, it can be tough -- or even impossible in some cases -- for plaintiffs to deduct their legal fees. Yes, that can actually mean paying taxes on 100 percent of the money, even though a contingent fee lawyer takes 40 percent or more off the top as legal fees.
However, since many tax rules are not black and white, there is often considerable tax planning at s...
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